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Medicines Company (MDCO) Q2 Loss Narrows, Revenues Tank Y/Y

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The Medicines Company (MDCO - Free Report) incurred second-quarter 2018 loss of 63 cents per share, narrower than the Zacks Consensus Estimate of a loss of 64 cents and the year-ago loss of 72 cents.

The company’s shares have increased 44.8% so far this year against the industry’s decrease of 4.4%.

Quarterly revenues plunged 84.7% year over year to $1.7 million. Also, the top line missed the Zacks Consensus Estimate of $7.58 million. This downside in the quarter was mainly attributable to lower sales of the company’s marketed drug, Angiomax, which faces generic competition in the United States.

Notably, in January 2018, The Medicines Company completed the sale of its infectious disease business unit to Melinta Therapeutics, an antibiotics company. With this divestiture, the former sold the worldwide rights of Orbactiv, Minocin and Vabomere. This deal was executed for $270 million in upfront consideration and guaranteed payments. The company is also entitled to receive tiered royalty payments of 5-25% on worldwide net sales of the aforementioned drugs.

The Medicines Company’s adjusted research and development (R&D) expenses (excluding the impact of one-time items) increased 27.1% year over year to $26.4 million primarily due to higher spend to support inclisiran. It is the company’s lead candidate, developed under a collaboration agreement with Alnylam Pharmaceuticals (ALNY - Free Report) for treating hypercholesterolemia.

In June, an Independent Data Monitoring Committee recommended continuation of phase III studies (ORION) of inclisiran unmodified. Moreover, in May, the company announced data from phase II ORION-1 study, which demonstrated that inclisiran led to reduction in key atherogenic lipoproteins other than LDL-C found in the blood that are responsible for heart attacks and strokes.

The company anticipates submitting a regulatory filing for inclisiran in the United States and EU by the end of 2019.

Adjusted selling, general and administrative (SG&A) expenses (excluding the impact of one-time items) declined 52.4% to $15.2 million.

The company believes that its $162.5 million in cash and cash equivalents as of Jun 30, 2018 along with some fixed and non-fixed source of payments is expected to be enough to fund operations till inclisiran’s launch.

The Medicines Company Price, Consensus and EPS Surprise

 

The Medicines Company Price, Consensus and EPS Surprise | The Medicines Company Quote

Zacks Rank & Stocks to Consider

The Medicines Company currently carries a Zacks Rank #3 (Hold).

A couple of better-ranked stocks to consider in the biotech sector are Vertex Pharmaceuticals Incorporated (VRTX - Free Report) and Seattle Genetics, Inc. (SGEN - Free Report) . Both the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Vertex’s earnings per share estimates moved up from $3.16 to $3.79 for 2018 and from $4.33 to $4.58 for 2019 over the last 30 days. The company delivered a positive earnings surprise in all the trailing four quarters, with an average beat of 27.5%. The company’s shares have rallied 25.4% year to date.

Seattle Genetics’ loss per share estimates narrowed from $1.81 to $1.27 for 2018 and from 81 cents to 68 cents over the last 30 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with an average beat of 12.93%.  The stock has surged 68.2% so far this year.

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